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It’s a great thing to be generous but there are some key things to keep in mind when you’re getting ready to give.

DO be strategic. “The first thing most donors do wrong is to give to a charity because they are asked, either by a friend or the charity itself,” says Sandra Miniutti, vice president of marketing and CFO of Charity Navigator. “We advise flipping that whole scenario upside down and being proactive about first determining what you are passionate about.” Create an inventory in your head and heart about the two or three causes most important to you. Next, figure out if you want to give nationally, globally or locally. Then do a quick search online, drilling down by type of organization and ZIP code to find ones you like. “Be very specific,” Miniutti says.

DO look under the hood. “Since you are likely making an investment that is meaningful to you, whether that is $10, $100, or $1,000, you want to make sure you have done your homework first,” Miniutti says. Here’s how: Research the charity’s financials and ratings on charitynavigator.org, guidestar.org, charitywatch.org or the Better Business Bureau’s Wise Giving Alliance (give.org). For large charities, visit their websites to look at their annual reports.

“Don’t depend on just one source—a board member you know, a rating service or whatever—to decide how a charity operates,” says Eileen Heisman, president and CEO of the National Philanthropic Trust, a public charity that provides philanthropic advice to donors, foundations and financial institutions. “Get at least three sources of information to make sure the organization is something you want to give to.” Remember to double check the organization’s name (some lower-rated charities have names that mimic those of higher-rated ones) and check the charity’s privacy policy (to make sure it will not sell your name to other charities).

DO get up close and personal. Call the charity, reach out to a board member, and, if a charity is local, go on a site visit or volunteer. “There is nothing more powerful than going to the front lines to see what a charity is doing,” says Heisman. “Really smart contributors always make site visits, because no matter what you read about a charity, it’s 10 times more valuable to actually go and see its work.”

DO consider following the leader. Heisman says one smart trick is to pick a businessman or even a foundation you think has a smart approach to giving and see what causes they are giving to. “Believe me, they are doing a lot of homework,” she says, “so piggyback onto that knowledge.”

DO learn about the tax deduction status of your donation and keep good records for tax season. Under IRS rules, if you want to claim a deduction, you need to document all of your cash donations with a canceled check, credit card statement, bank statement or written acknowledgment from the charity. If you donate $250 or more, you must get a receipt from the charity giving the value and date of your gift and a verification that you received no goods or services in return. And know that when you donate a vehicle, the IRS will look closely to make sure you did not overstate its value.

DON’T be afraid to take a risk. “A lot of people think you should only give to the tried-and-true, but just because an organization has been around for a long time doesn’t mean it’s good—or bad,” Heisman says. “Sometimes scrappy, entrepreneurial organizations come up with great, fresh solutions because they really have their feet on the ground close to the problems.”

DON’T spread yourself too thin. “If you have $1,000 to give away, pick three charities and divide the money among them; don’t pick 10 charities and give $100 to each,” says Heisman. Charities have high overhead, so if you give a small amount to a lot of charities, a higher percentage of your donation will be eaten up by administrative and fund-raising costs. “It’s the opposite of the way you invest in the stock market, where diversity is key to minimizing risk,” Miniutti says. If you choose only a few causes to donate to, you can “set it and forget it.”

DON’T feel you have to go it alone. Consider pooling your resources. “A lot of people don’t give because they think they can’t give enough,” says Jennifer Iacovelli, author of the new book Simple Giving (Tarcher). One effective way of giving is to put together a group of friends, family members or coworkers, decide on a monthly donation (say, $5 each), and meet throughout the year with the goal of donating to a cause that resonates with all of you, she says. (For guidance, visit givingcirclesfund.org, a nonprofit that supports shared giving and social investment networking.)

DON’T hesitate to say no. If a telemarketing solicitor calls to ask for your donation, hang up. “They tend to talk to you about issues that tug at your heartstrings, like veterans and sick children,” Miniutti says, “and they know you are more apt to make a donation because you are scrambling around trying to put dinner on the table,” but they are paid solicitors and very little of the money they raise goes to actual charitable programs.

AMG/Parade Digital

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